Chapter 3 - Job Order Costing - A Question 10 - HW3 - Connect Saved Help Save & Exit Submit Check my work Magic Realm, Inc., has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $20 per game. Fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. Production of the game is entrusted to a printing contractor Variable expenses consist mostly of payments to this contractor. Required: 1-a. Prepare a contribution format income statement for the game last year 1-6. Compute the degree of operating leverage. 2. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year? b. What is the expected amount of net operating income for next year? (Do not prepare an income statement, use the degree of operating leverage to compute your answer.) Complete this question by entering your answers in the tabs below Req 11 Reg 1B Reg 2 Prepare a contribution format income statement for the game last year, Magic Realm, Inc. Contribution Income Statement Total Per Unit Dron 10 11 we Saved . Menlo Company distributes a single product. The company's sales and expenses for last Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ 450,000 180,000 270,000 216,000 $ 54,000 Per Unit $ 30 12 $18 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-eve- 3-a. How many units would have to be sold each month to attain a target profit of $90,000 3-b. Verify your answer by preparing a contribution format income statement at the targets 4. Refer to the original data. Compute the company's margin of safety in both dollar and per 5. What is the company's CM ratio? If sales increase by $50,000 per month and there is no expenses, by how much would you expect monthly net operating income to increase? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 3B Reg 4 Reg 5 What is the monthly break-even point in unit sales and in dollar sales?